Electricity has been a prime concern for a quarter of India’s population that currently lives in the dark. It is because of this reason that the then UPA II government launched the Jawaharlal Nehru National Solar Mission (NSM) in 2010 and the Modi government is focussing on it as part of its electrification drive.
The aim of the NSM is to utilise solar energy for generating power that would not only help meet India’s growing energy needs but also lower its dependence on fossil fuels, thereby reducing emissions.
But NSM got stuck in a trade dispute with the United States filing a suit against India in the World Trade Organization (WTO) in 2013.
The US alleges that certain provisions in the NSM violated key aspects of trade. According to NSM rules, subsidies will be given on use of ‘made in India’ solar cells, solar modules and thin film technologies.
Since the United States exports the thin film technologies, it found the rules directly threatening its business.
The United States claims that the measures appear to be inconsistent with: Article III:4 of the GATT 1994; Article 2.1 of the TRIMs Agreement; and Articles 3.1(b), 3.2, 5(c), 6.3(a) and (c), and 25 of the SCM Agreement.
In its suit, Washington claimed that India’s measures appear to nullify or impair the benefits accruing to the United States directly or indirectly under the cited agreements.
According to India’s Power Ministry, 70 per cent of India’s electricity generation comes from thermal sources (coal, gas, and oil), of which coal forms 60 per cent. Fifteen per cent of the power produced is through renewable sources.
India’s total power output is 284,303MW. With its solar power programme, India aims at adding 100,000MW of solar power by 2022.
But in August 2015, the WTO issued a ruling that was not in India’s favour. The WTO informed both India and the US of its decision. The ruling has not been announced yet; it is expected to be made this Wednesday.
The three-member Dispute Settlement Board (DSB) was headed by former New Zealand envoy David Walker.
Brazil, Canada, China, the European Union, Japan, Korea, Malaysia, Norway, the Russian Federation, Turkey, Ecuador, Saudi Arabia and Chinese Taipei acted as third party to the dispute.
The Modi government is pushing hard to complete the electrification work in 18,452 unelectrified villages in 1000 days by May 1, 2018. Power Minister Piyush Goyal said that one-third of the villages have been electrified.
That drive can get a major boost if the WTO and the US do not meddle with India’s development plans which include the generation of power from solar energy.
That the US is objecting to the subsidies given by India to boost manufacturing within the country smacks of double standards. United States gives similar subsidies to home companies working in the renewable energy sector.
Thankfully, India did not take the WTO punch lying down; New Delhi provided a five-page questionnaire listing US programmes that give such subsidies highlighting the US double standards.
Just before last year’s WTO ruling, India had started the test run of a solar powered train – a giant leap in itself.
Both countries will now be holding talks to settle the dispute out-of-court. Organisations working towards a green energy future have criticised the United States for trying to throttle India’s attempts at empowering itself and combat climate change through solar energy.